Central Bank – In The Search of Alternatives for 400 million Euro
The Cypriot authorities are seeking alternatives for the allocation of €400 million from the Central Bank to the Government, in view of the advent of the creditors at the end of the month.
The scenario of selling gold seems to have been permanently rejected and the administration of the CB seeks other ways to secure the €400 million
The welfare program for the €400 million subjects to the obligations of the CB with the Treaty and the Statute of the EU.
The reference to the Treaty and the Statute binds the hands of Cypriot authorities, since they should find solutions that will be interpreted by the European authorities as monetary financing rule – something prohibited by the statutes of the ECB.
Part of the ammount needed by the government to refinance debt, expected to arise from the profit recorded in 2013 CB, estimated around €200 million
By law, 80 % of the profits of the QDs transferred to state coffers. In 2012 however, the CB lasted much profit as provisions for possible losses from granting ELA.
The senior Bank roofs are arguing that predictions need not be so large. Decrease in provisions means that the Bank may transfer the government greater amount, possibly by accumulated – not just last year – profits.
The ECB itself considers however wise detained forecasts concession ELA – something that was pointed out in a statement in April himself Mario Draghi.
Another possible setting is the allocation of State assets(eg real estate) in CB versus financing. But this may be considered monetary financing.
At management level in the QDs is considering, other ways of securing the amount of the government, possibly with functional measures to the Ministry of Finance.
Part of the solution will be given by the creditors. The scenarios discussed is the acceptance of their proposal lengthening of the transfer of €400 million by 2015 or even 2016. Until then, the CB is expected to have additional profits that could be transferred to state coffers.
Sorry. No data so far.